|
New investment fund for private Kazak enterprises
A new fund specifically targeted at Kazakstan has been established to invest in private Kazak enterprises with the help of the European Bank for Reconstruction and Development (EBRD), which is investing ECU 30 million. Apart from providing finance, the GIMV Kazakstan Post-Privatisation Fund will help companies to restructure and modernise. It will be managed by the Investment Company for Flanders (GIMV).
Sven Hegstad, Director of the Early Stage Equity Team at the EBRD, said: "At the initial stages of the screening process, we were able to identify many excellent investment opportunities in Kazakstan, which has a wealth of natural resources and a well-established manufacturing base. Traditionally, Kazakstan has served primarily as a supplier of raw materials and unprocessed goods to Russia; hence there is considerable scope for developing higher value-added products for its large domestic market and those of neighbouring countries."
Fokion Fotiadis, Head of the Unit for Relations with Central Asia at the European Commission, said: "Kazakstan has made substantial progress in the privatisation process; the Post-Privatisation Fund will build on this progress, enabling privatised firms to grow and prosper. The Tacis programme will be facilitating the investment process, with vital technical assistance for restructuring and corporate governance.
The Fund, which is the first country fund targeted at Kazakstan, is initially capitalised at ECU 30 million with an initial ECU 7.5 million in technical assistance from the European Union's Tacis programme. This provides grant finance for know-how to support the process of transformation to market economies and democratic societies in the Commonwealth of Independent States. In addition, GIMV (via its subsidiary, the Fund New Europe) will co-invest a total of ECU 3 million in an amount equal to 10 per cent of each investment made by the Fund.
The objective of the Fund is to assist private and recently privatised enterprises to restructure and modernise through the provision of equity finance and effective governance and advisory support. Investments will range in size from ECU 300,000 to ECU 3 million and will not be limited to any specific sectors. The Fund is expected to invest its capital fully within four years and to have exited from its investments within 10 years.
To date, the EBRD has approved ECU 138.0 million of projects for Kazakstan.Tacis has committed more than ECU 75 million to Kazakstan since its activities there began in 1992. From the outset, enterprise restructuring, including privatisation, has been a priority sector, and the Post-Privatisation Fund will complement and develop this assistance. Investment funds of this nature have already been created by the EBRD with Tacis support in Russia.
GIMV is an investment company based in Belgium, with approximately US$ 1 billion in assets. Its core activities are venture capital, growth financing and financing of projects in emerging markets.
|
